Key facts
- Investor retreat from the oil market has reached record pace this year.
- U.S. gasoline inventories are at their lowest seasonal level in a decade.
- U.S. oil drilling activity has increased for six consecutive weeks.
- The number of active oil rigs in the U.S. has risen to 431.
- Crude futures have surged by 35% since late February.
- Tanker traffic through the Strait of Hormuz has fallen by 90% to 95%.
- The U.S. Department of Energy has authorized the release of 172 million barrels from the Strategic Petroleum Reserve.
- U.S. commercial oil inventories are approaching critically low levels.
- BP is seeking to sell stakes in two Gulf of Mexico oil projects.
- Alex Volkov is set to be appointed head of global trading at Exxon Mobil.
Global oil markets are facing record declines in liquidity as investors withdraw due to extreme price volatility. This volatility stems from geopolitical uncertainty and conflicting signals regarding the Iran conflict. U.S. gasoline inventories have reached their lowest seasonal level in ten years, raising concerns about tight supplies and increased prices as the summer driving season commences. Robust domestic demand and elevated fuel exports are contributing to the strain on inventories, with disruptions in the Strait of Hormuz exacerbating the situation. U.S. oil drilling activity has seen a sustained increase for six consecutive weeks, with the number of active rigs rising by two to 431. This growth is fueled by a significant 35% surge in crude futures since late February, with prices averaging close to $98 per barrel. Tanker traffic through the Strait of Hormuz has dramatically decreased, falling by 90% to 95% compared to pre-war levels. Remaining oil cargo movements are occurring under increasingly opaque conditions, making it difficult to track global energy flows and assess supply visibility. The U.S. Department of Energy has authorized the release of 172 million barrels from the Strategic Petroleum Reserve in an effort to mitigate rising prices and supply disruptions. U.S. commercial oil inventories are approaching critically low levels, with the ongoing conflict with Iran lacking a clear resolution and its duration being a significant factor for future supply. In corporate developments, BP is initiating the sale of minority stakes in its Kaskida and Tiber projects in the Gulf of Mexico to free up capital for reinvestment in oil and gas. Exxon Mobil is also poised to appoint Alex Volkov as its new head of global trading, succeeding Tracey Gunnlaugsson, who is reportedly retiring.